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Google facing irrelevance in China

Local rival Qihoo drops Google from popular portal

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Google's key local partner Qihoo dropped has dropped the text ad giant from its popular portal site and promptly replaced it with its own newly launched service.

A visit to Qihoo’s hao.360.cn directory site, which it claims gets more traffic than a similar page run by Baidu – hao123.com – shows the firm has indeed relegated Google to alternative search options along with the likes of Baidu and newcomer Jike.

In its place is Qihoo’s so.360.cn search service, which it launched last week.

The firm’s move could be bad news for Google, according to market watcher Bill Bishop.

“Qihoo was a very important traffic partner for Google in China,” he wrote in a daily newsletter.

“If Qihoo no longer sends Google searches then Google’s China search market share could drop to as low as five to seven per cent, aka irrelevance.”

There are rumours flying around the Chinese web that so.360.cn has already managed to supplant Google in the domestic search market.

Fu Sheng, CEO of local software company Kingsoft, claims in an Tencent Tech article (via Marbridge Daily) that Qihoo already has a 10 per cent market share, although such speculation would seem to be a little premature.

Google’s current market share in 15.7 per cent while Baidu is sitting pretty with 78.6 per cent. The Chocolate Factory has never recovered since it moved its search servers to Hong Kong in 2010 as a result of frustrations with local censorship laws.

However, it may be too early to judge the impact of Qihoo’s decision to drop Google as its default search engine.

The firm, which claims to make China’s most popular browser and also sells AV tools, was recently accused by Anonymous of lying about the traffic it gets to hao.360.cn in order to boost ad revenue.

If the claims made by Anonymous and others are true than perhaps Google’s market share won’t be hit too hard by the decision.

The hype is certainly working, however, with Baidu shares dropping over five per cent and Qihoo’s jumping to a three month high on Tuesday, according to Bloomberg. ®